-Investment Possibilities According to Your Investor Profile-
When I started to write this series, it was actually meant to be one post about a general way to approach your investment strategy. While writing it, I realized how much stuff there is to know if you want to invest by yourself. That said, I will keep writing about this series but I won’t put all the other posts in a row (imagine how boring this could be if you are already set?). So today, I will give you options you can use according to different investor profiles (I linked them to a type of car 😉 ):
The bulldozer (100% fixed income):
If you look at 100% fixed income, you are probably withdrawing money from your investment account for retirement or planning to make a purchase shortly.
– You can probably find great savings account giving you near 3% interest (they may drop since interest rates are at their lowest).
– Another great idea would be short term certificate deposit if you plan on making a purchase or a bond ladder or CD ladder if you are about to retire.
– Money market funds are another investing possibility. However you will need quite an amount (more than 100K) if you are looking for a good rate.
– If you are Canadian, you should put your first $5,000 in a TFSA so you can save taxes on the interest earned.
The truck with a trailer (80%-70% fixed income / 20%-30% equity)
If you are scared of the markets but you sill want to try it out, you may invest a small portion of your money in the stock market. The easy solution is to get a managed investment portfolio including a small % invested in the markets. You won’t have much follow-up to do and you will be sure to keep the same investment strategy.
– Another solution would be to split your fixed income into a bond ladder and buy balanced funds (more aggressive funds). Therefore, you would save on fees (bond and cd ladders don’t cost a thing to manage) and you will pay manager to trade stocks. However, you must follow-up on your things to make sure you always keep the same investor profile.
So that’s it for today, next Monday, we will see investing suggestions for 3 more type of investors. The best stuff is yet to come 😉
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